When Facebook went public this year, the company released a limited amount of shares for the general public to buy, as is common practice. The other shares were privately held by angel investors and venture-capital firms that invested in the company early on. According to the Wall Street Journal, a large number of those shares could be unlocking and flooding the market as soon as this week.
Despite the fact that the stock price is down 43% from its offering price, early angel investors looking to release this privately held stock stand to make a healthy return on their investments. If too many shares get released, analysts believe it could discourage the public from buying, driving the stock price lower.
The lock-up period for one group of private Facebook shares has expired, and the once private stock has been flooding the market, according to USA Today. In total, 271 millions shares will be unlocked this week, allowing early investors, employees, and the like to sell their stock.